Earlier this year, Malaysian institutions did something that sounds technical and turns out to be quietly historic.
The International Centre for Education in Islamic Finance (INCEIF) University, through its International Syariah Research Academy for Islamic Finance (ISRA) institute, widened a partnership with Malaysian technology firm Zetrix AI to put Islamic finance answers in the hands of an artificial intelligence (AI) system trained on Syariah-validated sources.
On the surface, this is one more corporate tie-up in a year crowded with them. Sit with it for a moment, and it becomes something larger. It is an early bid to define a category that does not yet exist anywhere in the world.
Consider the size of the prize. According to the Islamic Corporation for the Development of the Private Sector (ICD) and London Stock Exchange Group Islamic Finance Development Report 2025, global Islamic finance assets reached almost US$5.98 trillion in 2024, a 15 per cent rise in a single year. The same report projects the industry to reach US$9.7 trillion by 2029.
The global sukuk market has now come close to US$1 trillion in outstanding value. This is no longer a niche. It is a mainstream financial system, and a fast-growing one. And Malaysia sits at the top of it.
The same report ranks Malaysia first in the world for the development of its Islamic finance ecosystem, ahead of every other market. We are not a participant in this industry. We are, by most measures, its leading hub.
Yet for all that scale, one rulebook is missing. There is no widely accepted framework telling an Islamic bank how to govern an AI system the way Syariah already governs a financing contract. The technology is arriving faster than the rules. That gap is the opportunity because gaps like this are filled by whoever moves first with credibility.
To see why this matters, you have to understand that Islamic finance is not conventional finance with a label changed. It rests on principles. Riba, the charging of interest, is prohibited. Gharar, excessive uncertainty or ambiguity in a contract, is to be avoided. Wealth is meant to serve real economic activity and the common good, the purpose scholars call Maqasid al-Syariah, the higher objectives of the law.
Now hold a modern AI model up against those principles, and three honest questions appear.
The first is explainability. A Syariah board must be able to say why a decision was made. Many advanced AI systems cannot show their reasoning in a way a scholar can audit. A decision that no one can fully explain sits uncomfortably close to gharar.
The second is accountability. When a system approves financing or screens a transaction, who carries responsibility for that ruling – the institution, the board or the model? Islamic finance has always insisted on a clear human chain of responsibility, and a machine does not break that chain unless we let it.
The third is the data. A model trained on the wrong sources can quietly absorb interest-based logic or non-compliant assumptions, then repeat them at scale, in seconds, across thousands of decisions. Speed is a gift only when the foundation is sound.
These are not reasons to slow down. They are reasons to govern well.
Malaysia is not starting from zero. Our Islamic banking sector runs under the Islamic Financial Services Act 2013 and a Syariah governance framework overseen by Bank Negara Malaysia and its Syariah Advisory Council.
We have decades of institutional muscle in turning religious principle into auditable financial practice. Few places hold scholarship, regulation and market depth together in one ecosystem the way we do.
The recent moves build directly on that strength. In September 2025, the Department of Islamic Development Malaysia signed a letter of intent with Zetrix AI centred on NurAI, a model the company describes as the world’s first large language model aligned to Syariah, and on the governance and certification that would sit around it.
On March 11, INCEIF widened the work through ISRA into Islamic finance applications. The stated aim is a Syariah AI certification framework.
Read plainly, that is Malaysia trying to set a standard, not merely adopt one written elsewhere.
So what should we do with this head start?
First, treat Syariah AI governance as national infrastructure, not a single company’s product. A standard earns trust when it is open, independently audited and larger than any one vendor. The certification framework should be designed so that any institution, here or abroad, can be measured against it.
Second, seat the technologist and the scholar at the same table. The strongest thinking in this field calls for two oversight functions working together – an AI governance committee and a Syariah board reviewing the same system side by side rather than one after the other. We should make that pairing the Malaysian default.
Third, write for export from day one. The Gulf states, Indonesia, Pakistan and a growing list of markets face exactly the question we face. A framework drafted in Kuala Lumpur, available in English and Arabic, and tested first on our own institutions becomes a standard the wider Islamic world can adopt rather than reinvent. That is soft power of the most durable kind.
Fourth, keep a human at the point of judgment. Let the machine do the screening, the drafting and the speed. Let a named, answerable person sign the ruling. That single discipline protects both the principle and the public, and it costs us nothing we should not gladly pay.
The rest of the world is busy writing AI rules for everyone, and that work matters. But there is a second rulebook waiting to be written, one that sits at the meeting point of faith, finance and code. Almost no one is positioned to write it. We are.
Leadership is not always about moving fastest. Sometimes it is about being the one place where the right pieces already sit together and choosing to act before the moment passes us by.
This is one of those moments.
Ts Dr Manju Appathurai holds dual PhDs in Artificial Intelligence (2026) and Crisis Economics, is a licensed clinical psychologist and Licensed Technologist (Ts), and is the founding principal of Mahat Advisory and a strategic adviser to the Dutch Coalition for Defence and Security (Malaysia).
The views expressed here are the personal opinion of the writer and do not represent that of Twentytwo13.
